IMF Executive Board Approves US$658.9 Million Under the ECF and EFF Arrangements for Côte d’Ivoire
IMF News, December 13, 2016
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- Published: December 13, 2016
Approval and financing
- On December 12, 2016 the Executive Board approved two three-year arrangements under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) for Côte d’Ivoire for a combined total of SDR 487.8 million (about US$658.9 million, or 75 percent of Côte d’Ivoire’s quota).
- The Executive Board’s decision enables an immediate disbursement of SDR 69.686 million (about US$94.1 million).
- The remaining amount will be phased over the duration of the program, subject to semi-annual reviews.
- Côte d’Ivoire has an IMF quota of SDR 650.40 million.
Program objectives and policy focus
- The program will support the authorities’ economic and financial reform program to:
- achieve a sustainable balance of payments position;
- promote inclusive growth and poverty reduction by investing in infrastructure and priority social projects;
- contain current spending, catalyze official and private financing, and build resilience to future economic shocks.
- Program priorities include:
- creating fiscal space for infrastructure investment and social spending while strengthening policy buffers;
- maintaining public debt on a sustainable path and facilitating debt restructuring of the national oil refinery;
- enhancing monitoring of the debts of state-owned enterprises and addressing vulnerabilities in public banks;
- improving tax administration and adopting new tax policy measures to increase revenue mobilization;
- containing current spending and strengthening public financial and debt management to ensure debt sustainability;
- enhancing surveillance of public enterprises and extending budget coverage to extra-budgetary entities;
- reinforcing the framework for public-private partnerships and pressing ahead with the reform of public enterprises to mitigate fiscal risks;
- promoting financial inclusion and recapitalizing and strengthening public banks to sustain healthy credit expansion and private sector-led growth;
- improving the business environment, particularly in paying taxes, obtaining permits, and facilitating trade;
- improving the quality and dissemination of economic statistics.
Recent economic developments and outlook
- Real GDP grew by 9 percent per year on average during 2012–15, driven by investment and consumption, and is expected to remain strong over the medium term, averaging 7.7 percent per year during 2017-19.
- Solid macroeconomic performance continued in the first half of 2016 notwithstanding the impact of a drought on agriculture; real GDP growth is projected at around 8 percent for 2016.
- The budget deficit is projected at 4 percent of GDP in 2016, reflecting higher spending, including for security, health and education.
- Inflation is projected to remain below 3 percent.
- Reflecting investment-driven imports, the external current account deficit would widen to about 2.5 percent of GDP.
Program summary and targets
- Under the program’s planned policies, the government’s budget deficit would converge to the West African Economic and Monetary Union norm of 3 percent of GDP by 2019 to preserve public debt sustainability and support the regional international reserves pool.
- Prudent public financial and debt management practices along with public enterprise reform would ensure fiscal sustainability and mitigate fiscal risks.
- Financial sector policies would focus on reducing vulnerabilities, including in the public banks, and fostering financial inclusion.
- Structural reforms will improve the business environment.
- Measures to improve the quality and dissemination of economic statistics will support policy making and investment.
- The program is expected to catalyze official and private financing and builds on performance under the previous Fund-supported program in 2011–15.
Selected economic indicators (highlights and exact figures)
- Real GDP growth:
- 2015 Est.: 8.9
- 2016 Proj.: 7.9
- 2017 Proj.: 7.8
- 2018 Proj.: 7.3
- 2019 Proj.: 7.2
- 2020 Proj.: (not listed)
- GDP deflator:
- 2015 Est.: 1.8
- 2016 Proj.: 1.0
- 2017 Proj.: 1.4
- 2018 Proj.: 1.9
- 2019 Proj.: 2.0
- Consumer price index (annual average):
- 2015 Est.: 1.2
- 2016 Proj.: 1.5
- Exports of goods, f.o.b., at current prices:
- 2015 Est.: 8.0
- 2016 Proj.: 3.3
- 2017 Proj.: 12.2
- 2018 Proj.: 10.8
- 2019 Proj.: 10.0
- 2020 Proj.: 9.9
- Imports of goods, f.o.b., at current prices:
- 2015 Est.: 11.4
- 2016 Proj.: 14.9
- 2017 Proj.: 12.3
- 2018 Proj.: 11.3
- 2019 Proj.: 10.7
- Export volume:
- 2015 Est.: 10.6
- 2016 Proj.: 3.1
- 2017 Proj.: 6.2
- 2018 Proj.: 5.9
- 2019 Proj.: 5.4
- 2020 Proj.: 5.1
- Import volume:
- 2015 Est.: 13.8
- 2016 Proj.: 10.2
- 2017 Proj.: 8.8
- 2018 Proj.: 9.3
- Total revenue and grants (percent of GDP):
- 2015 Est.: 18.9
- 2016 Proj.: 11.7
- 2017 Proj.: 10.4
- Total expenditure (percent of GDP):
- 2015 Est.: 21.8
- 2016 Proj.: 16.7
- 2017 Proj.: 9.5
- 2018 Proj.: 9.8
- 2019 Proj.: 8.2
- 2020 Proj.: 9.6
- Money and quasi-money (M2) change:
- 2015 Est.: 18.8
- 2016 Proj.: 14.3
- 2017 Proj.: 13.1
- Credit to the economy (percent change):
- 2015 Est.: 29.6
- 2016 Proj.: 14.7
- 2017 Proj.: 13.4
- 2018 Proj.: 10.1
- 2019 Proj.: 11.9
- 2020 Proj.: 11.0
- Government and saving indicators (percent of GDP unless otherwise indicated):
- Total revenue (series of numbers listed): 20.2; 20.7; 21.1; 21.4; 21.5; 21.7
- Total revenue (alternate series): 19.1; 19.6; 19.8; 20.1; 23.1; 24.7; 24.8; 24.5
- Overall balance, incl. grants, payment order basis: -2.9; -4.0; -3.7; -3.4; -3.0; -2.8
- Primary basic balance 1/: -0.4; -1.6; 0.6; 1.3
- Gross investment: 17.8; 19.3; 21.2
- Gross domestic saving: 21.6; 2.9; 2.6; 3.6; 4.2; 4.5; 4.9
- Gross national saving: 16.9; 17.5; 17.1; 17.4; 16.8
- External sector balance:
- Current account balance (including official transfers): -1.0; -2.0; -2.5; -2.7; -2.6
- Current account balance (excluding official transfers): -2.4; -4.1; -4.3; -4.2
- Overall balance: -0.3; 1.1; 0.7; 0.2
- Public sector debt (percent of GDP):
- Central government debt, gross: 47.8; 48.3; 47.9; 46.4; 44.9; 43.4
- Central government debt (excluding C2D): 40.5; 42.4; 43.2; 42.8; 42.2; 41.5
- External debt: 29.8; 28.9; 28.2; 27.4; 26.6; 25.7
- External debt (excluding C2D): 22.5; 23.0; 23.5; 23.8; 23.9
- External debt-service due (CFAF billions):
- 2015: 412
- 2016: 477
- 2017: 523
- 2018: 616
- 2019: 702
- 2020: 764
- Percent of exports of goods and services: 6.3; 6.5; 6.8; 6.7
- Percent of government revenue: 11.6; 12.8; 12.5
- Memorandum items:
- Nominal GDP (CFAF billions): 19,368; 21,102; 23,069; 25,344; 27,736; 30,324
- Nominal GDP at market prices (US$ billions): 32.8; 35.9; 39.7; 43.8; 48.2; 53.1
- Population (million): 23.7; 24.3; 25.0; 25.6; 26.3; 27.0
- Nominal GDP per capita (CFAF thousands): 817; 867; 924; 990; 1,056; 1,125
- Nominal GDP per capita (US$): 1,382; 1,477; 1,589; 1,709; 1,835; 1,970
- Real GDP per capita growth (percent): 5.3; 4.6
- Poverty rate (in percent): 46.3
Key messages from Deputy Managing Director Mr. Furusawa (Acting Chair)
- Côte d'Ivoire’s economy has made an impressive turnaround since 2012 and its outlook remains favorable.
- Reducing poverty and closing human capital and infrastructure gaps will take time, and structural bottlenecks pose challenges.
- The authorities’ program under the ECF and EFF appropriately focuses on inclusive, sustainable growth; structural transformation of the economy; and poverty reduction.
- Improving tax administration and new tax policy measures will help increase revenue mobilization.
- Containing current spending, prudent public financial and debt management, enhanced surveillance of public enterprises, extending budget coverage to extra-budgetary entities, and reinforcing the framework for public-private partnerships will mitigate fiscal risks.
- Recapitalizing and strengthening public banks and promoting financial inclusion will help sustain credit expansion and private sector-led growth.
- Further improvements to the business environment—paying taxes, obtaining permits, and facilitating trade—and improved economic statistics would support policy making and private investment.
Press Release No. 16/554 — IMF Communications Department, December 12, 2016.